Putting America's $18 Billion Economy in Global Perspective

The map above was created by matching economic output in US states in 2014 to foreign countries with comparable nominal GDPs, using BEA data for GDP by U.S. state and GDP by country from the International Monetary Fund, via Wikipedia here. 

For each U.S. state (and the District of Columbia), Carpe Diem tried to find the country closest in economic size in 2014 (measured by nominal GDP), and for each state there was a country with a pretty close match – those countries are displayed in the map above and in the table below. 

Obviously, in some cases the closest match was a country that produced slightly more, or slightly less, economic output in 2014 than a given U.S. state.

It’s pretty amazing how ridiculously large the US economy is, and the map above helps put America’s GDP of nearly $18 trillion in 2014 into perspective by comparing the GDP of U.S. states to other country’s entire national GDP.

Analysis of Today's Markets & Economy

How Might Investors Make Sense of Today’s Markets and Economy?

Read more here...

Q&A on the Markets and the Economy @ Fidelity

Fed Raises Rates: What’s Next?

In mid-December, the Federal Reserve announced the first rate hike in nearly 10 years. Here are four things to keep in mind.

1.	The first rate hike usually indicates economic improvement, not an imminent market downturn.

It’s important to keep in mind the context of today’s action. Historically, the first Fed hikes have not precipitated economic or market downturns. Typically, the first rate increase has been a signal that the economy has gained traction, and on average, asset markets have typically performed relatively well in the year or two after the first hike.

2.	This round of rate hikes may be gradual.

This round of rates hikes is starting as the Fed faces a far weaker backdrop for global growth—as well as much lower inflation—than is typical for the first rate hike in a cycle. This would seem to imply the Fed will move forward at a gradual pace of tightening. This weaker global and inflation environment makes a dramatic spike in interest rates less likely.

3.	Higher rates could pressure commodities and emerging markets.

It is important to keep in mind that Fed monetary tightening does tighten global dollar liquidity as well. Because the dollar is the world’s reserve currency, this tighter liquidity has made it more difficult for many asset prices in recent months—including emerging-market equities, non-U.S. currencies, and commodity prices. These markets may remain volatile in the aftermath of the Fed’s first hike.

4.	The economy could stabilize.

Finally, our outlook is that the global economy will digest the Fed hike over the coming months. The rate increase may even boost confidence in the U.S. economy by reassuring us all that we are finally on a path to normalization. And with the U.S. still in a steady mid-cycle expansion, we expect the global economy to stabilize over the course of 2016. Markets are likely to be choppy, but overall I think the outlook for equities should be relatively favorable as the year unfolds.

https://www.fidelity.com/viewpoints/market-and-economic-insights/fed-raises-rate?ccsource=email_weekly

© 2015 These presentations are provided for informational purposes only. Read relevant legal disclosures.

A Tale of Two Economies...

Americans Losing Confidence in The Economy

Americans Losing Confidence in The Economy

It's bad news when Americans lose confidence in the economy.

When confidence deteriorates, consumers become worried about their jobs and their paychecks, which in turn makes them want to spend less. And considering that personal consumption accounts for 68% of gross domestic product, the consequences can be huge.

During the week ending Sunday, Gallup's US Economic Confidence Index fell to -9, the lowest level since December.

"The recent dip in Americans' economic confidence — which is being dragged down largely by the lower economic outlook component — is likely the culmination of a variety of economic factors," Gallup's Justin McCarthy writes.

The prices Americans were paying for gas increased in the latter half of April, with the US Energy Information Administration reporting an increase of 17 cents per gallon over two weeks. Gallup has found that Americans' confidence in the economy is related to how much they pay at the pump.

"Additionally, the recent report that the nation's GDP grew a lackluster 0.2% in the first quarter — a disappointing figure compared with previous quarterly growth — may have dampened consumers' economic hopes."

But like most economists, Gallup is optimistic this downturn is a temporary blip.

"Unless the economic news continues to be bad, Americans may soon forget about the weak first-quarter GDP and rising gas prices, which, the EIA projects, will stabilize during the summer," McCarthy added.

"And even in the midst of last week's negative economic news, there were bright spots, including the federal government's reporting increases in consumer spending and a 15-year low in jobless claims. But last week, the bad news appeared to carry more weight in Americans' evaluations than the good news."

Gallup's survey included 3,542 responses from adults in all 50 US states and the District of Columbia.

Warning Shot Across The Economic Bow: Retail Sales Down in December...

Bullish Omen: Durable Goods Orders Skyrocket...

Upward Sloping Treasury Yield Curve is a Bullish Omen for the Stock Market & the U.S. Economy

Recessions rarely occur when the yield curve is sloping upward.

America's Priorities Aren't Anywhere Near Washington's Priorities...

Good News: Economy and Employment Steadily Improving

The U.S. Economy Grows Only 2% in The 3rd Quarter

Political Cartoon of The Day: Four Years Ago...

Leading Economic Index Increases in May to Highest Level in 4 Years...

Persistent Uptrend in Industrial Production Bodes Well for U.S. Economy...

If Bush Tax Cuts Expire, Recession Likely In 2013...

Mortgage Rates Rising: A Sign That The Economy & The Housing Market Are Improving...

VIDEO: High Gasoline Prices Explained...

"Gas Prices Explained," from the same group that produced "Quantitative Easing Explained" (which now has more than 5 million views on YouTube).

In December, Consumer Confidence Rose To It's Highest Level Since April 2011

Quote of the Day: A Fundamental Economic & Political Fallacy...

A fundamental fallacy is the notion that politicians can "grow the economy" by taking money out of the private sector and spending it wherever it is politically expedient to spend it -- so long as they call spending "investment."

~Thomas Sowell - Economist

Quote of The Day: "The world economy is now in the grips of..."

"The world economy is now in the grips of a damaging feedback loop involving deteriorating fundamentals, lagging policy responses and destabilised financial markets.

If policymakers do not act boldly, and do so in a globally-coordinated fashion, the world risks tipping into a prolonged recession with worrisome institutional, political and social consequences."


Mohammed El-Erian, Pimco